Provisional assessments and refund limitation: refund on finalisation cannot be rejected as time-barred under final assessment rules.

Contemporaneous endorsements on the assessment memoranda established that the assessments for 1-4-1994 to 31-3-1995 were provisional, and the absence of a further formality such as a bond did not displace that position. Once the assessments were treated as provisional, the refund accrued on their finalisation, so the claim could not be rejected as time-barred under the limitation rule applicable to final assessments. The refund claim was therefore maintainable, the impugned order was set aside, and consequential relief followed.

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Issues: (i) whether the assessments for the period 1-4-1994 to 31-3-1995 were provisional; and (ii) whether the refund claim was barred by limitation.

Issue (i): whether the assessments for the period 1-4-1994 to 31-3-1995 were provisional.

Analysis: The record showed endorsements by the Range Superintendent on the assessment memoranda indicating that the assessments were provisional. The Tribunal also noted that the same assessee's earlier case had already been held to involve provisional assessments, and that the department could not ignore the contemporaneous endorsements merely because no further formality such as execution of bond was relied upon.

Conclusion: The assessments for the relevant period were provisional, in favour of the assessee.

Issue (ii): whether the refund claim was barred by limitation.

Analysis: Once the assessments were found to be provisional, the refund arose on finalisation of those assessments. In that situation, the claim could not be treated as time barred under the refund limitation provision applicable to final assessments. The refund claim was therefore maintainable.

Conclusion: The refund claim was not barred by limitation and was admissible, in favour of the assessee.

Final Conclusion: The impugned order was set aside and the refund claim was allowed with consequential relief.

Ratio Decidendi: Where assessments are shown to have remained provisional, refund on finalisation cannot be rejected as time barred under the limitation applicable to final assessments.

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